Kolkata: Higher fuel prices will drive down the profits of the global airlines sectorby 50% to $23 billion, International Air Transport Association (IATA)
has said in its financial outlook. Thanks to the elevated fuel prices, the net profit margin is set to decline to 2% and the net profit per passenger is supposed to hit $4.50, less than 50% of the $9.10 achieved in 2025. The IATA represents more than 370 airlines and they account for about 85% of the global air traffic. However, revenue for the airline industry is set to touch $1.165 trillion in 2026, which is 9.4% higher that the $1.065 trillion set last year. Incidentally, Akasa Air, Air India, Air India Express, IndiGo and SpiceJet are all members of IATA.
Premium for jet fuel at a peak
The supply constraints have driven jet fuel prices to an average of $152 per barrel in 2026, which is 70% higher compared to the $90 mark in 2025. The premium of jet fuel over Brent crude is expected to reach $57 per barrel, which is a peak, said IATA. Fuel costs of the sector is forecast to jump nearly 40% in 2026 — from $252 billion in 2025 to $350 billion.
“Total fuel consumption in 2026 is expected to remain unchanged from 2025, at 104 billion gallons. The rise in the price of jet fuel is therefore solely responsible for lifting the share of jet fuel in total operating expenses to 31.4 per cent in 2026, up from 25.4 per cent in 2025,” IATA said.
Jet fuel supply disruptions, flight cancellations
IATA Director General Willie Walsh has ascribed the woes of the sector to the conflict in West Asia and resultant disruption. “All airline bottom lines are suffering from the rapid 70 per cent rise in jet fuel prices. Some of the additional cost is being recuperated by adjusting prices and improving efficiency, but it will not be sufficient to maintain profitability at the previous year’s level,” he was quoted as saying in the media. The passenger load factor is expected to be 84 per cent in 2026, slightly higher than 83.5 per cent seen in 2025.
“Passenger numbers are expected to reach 5.1 billion in 2026 (up 2.4 per cent on 2025)… Airlines are expected to achieve a combined total net profit of USD 23.0 billion in 2026, which is roughly half the previously projected USD 41 billion. It is also roughly half the USD 45 billion net profit estimate for 2025,” IATA said.
This year, the net profit margin is pegged at 2 per cent, roughly half the previously projected 3.9 per cent. The expected figure is also below half of the 4.2 per cent estimate for 2025.
